From Theory to Practice: Institutional Insights into Inclusionary Zoning

Inclusionary zoning (IZ) links development approvals to affordable housing requirements and is an increasingly utilized policy tool globally. This literature review examines opportunities and prerequisites for implementing IZ in Malaysia’s urban housing context through an institutional analysis lens. The paper’s methodology involves a qualitative synthesis of academic scholarship from planning, policy, economics and law to develop a conceptual framework grounded in theory and comparative evidence. Analysis focuses on aligning IZ policy options with Malaysia’s multi-tiered governance environment which poses particular challenges but allows localized piloting. After reviewing the theoretical underpinnings, global cases and core policy design considerations, an incremental approach is recommended beginning with voluntary incentives. This builds experience to progress eventually to broader mandatory inclusion aligned with institutional capacities. IZ is situated within a broader affordable housing strategy given limitation as a stand-alone panacea. Tailored, modest initiatives can expand access without overburdening still-developing administrative systems. The review elucidates pragmatic steps to unlock IZ benefits in Malaysia through contexts-specific programs that judiciously harness market forces while adapting to institutional realities. The synthesized perspective informs policy-making and suggests future research directions to deepen understanding of implementing inclusionary models in Asian developing country contexts.